Anticipation Builds as Sea Limited Prepares for Q3 2024 Earnings Report

Sea Limited (SE) is set to release its third-quarter 2024 results on November 12.

The Zacks Consensus Estimate for earnings per share (EPS) has remained steady at 59 cents over the last month. In the same quarter last year, SE reported an EPS of 6 cents.

Stay informed on all quarterly announcements: See the Zacks Earnings Calendar.

The consensus estimate for third-quarter revenues stands at $4.12 billion, indicating a year-over-year growth of 19.31%.

Sea Limited Performance and EPS Trends

Severse the trend, SE has missed EPS estimates in the last four quarters, averaging a negative surprise of 75.70%.

As the next earnings announcement approaches, let’s look at what might influence these results.

Key Influencing Factors

SE’s performance in the third quarter is expected to benefit from its key divisions: e-commerce (Shopee), digital financial services (SeaMoney), and digital entertainment (Garena).

Sea Limited anticipates that Shopee will report positive adjusted EBITDA in the third quarter of 2024, owing to its strong market position in Southeast Asia, improved ad take rates, and better logistics efficiency.

The company is working to enhance its ad take rates, which are currently below industry averages. Already, it reported a 20% year-over-year increase in sellers using paid advertising in the second quarter of 2024. This growth in ad monetization should positively impact results for this upcoming quarter.

In addition, the rising demand for logistics is likely to lower order costs. The efficiency of its courier delivery platform, SPX Express, is expected to further improve customer satisfaction.

Furthermore, the expansion of SeaMoney’s digital financial services is likely to drive user engagement and revenue growth during the reported quarter. The increasing user base and loan amounts signal robust performance, particularly through Shopee’s initiatives.

Free Fire, a popular game with over 100 million daily active players, continues to be a significant revenue contributor for Sea Limited. The recent launch of games like Need for Speed: Mobile in select markets is anticipated to boost the Digital Entertainment segment this quarter.

What to Expect from Earnings Reports

Zacks’ model indicates that a combination of a positive Earnings ESP and a rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) can enhance the likelihood of an earnings beat. Unfortunately, this is not the case for Sea Limited right now.

Currently, Sea Limited has an Earnings ESP of 0.00% and a Zacks Rank of #3. Investors can explore optimal buying or selling opportunities ahead of earnings using our Earnings ESP Filter.

Consider These Stocks

Here are some companies with a favorable mix of elements for potential earnings outperformance in their upcoming reports:

Shopify (SHOP) displays an Earnings ESP of +5.78% and holds a Zacks Rank of #1. Year-to-date, Shopify shares have surged by 41.8%. The company is also set to report its third-quarter results on November 12.

Bilibili (BILI) enjoys an Earnings ESP of +10.00% and currently has a Zacks Rank of #2. Bilibili’s shares have appreciated by 70% year-to-date, with results due on November 14.

NVIDIA (NVDA) has an Earnings ESP of +2.30% and is ranked #2. The shares have skyrocketed 217.1% year-to-date, with earnings being reported on November 20.

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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.